Obama Admin's FTC's New rules for debt relief companies taking effect....

[FrenchieCat]

The FTC's new rules affecting most for-profit debt-relief services; credit-counseling, debt settlement and debt-negotiation companies started going into effect this past Friday.

If you didn't know......

These changes will hopefully help save hapless consumers from abuse, and may even put some of the sleazier services out of business. Here's when the new rules take effect and the basics of what they mean.

Starting Sept. 27: Tell the truth
According to the FTC, the new rules:

Require debt-relief companies to make specific disclosures to consumers.
Prohibit them from making misrepresentations.
Extend the Telemarketing Sales Rule to cover calls consumers make to these firms in response to debt-relief advertising.
What this means in plain English is that debt-settlement and similar for-profit companies can't overstate the success of their programs, and they must disclose potential negative side effects.


For example, many debt-settlement companies have in the past assured consumers that settling a debt won't negatively impact their credit scores. This is complete hogwash. Paying less on a debt than is owed will nearly always lower your credit score, as well as create potential income tax issues. For more examples of the false promises some debt-settlement companies routinely employ, see this story.


Starting Oct. 27: Don't charge until you do something
While telling the truth may prove difficult for some of the shadier debt-relief companies, the new rules that take effect Oct. 27 are really going to hurt. Because rather than charge up front for their services like many typically do today, they’ll have to wait until at least one of the following occurs:

In other words, until a debt-settlement or other company actually performs, they don't get paid. Another rule that will go into effect on Oct. 27 requires them to keep all customer funds in a segregated, insured account.

more....
http://articles.moneycentral.msn.com/SmartSpending/blog/page.aspx?post=1809061

[JTFrog]

1. K&R!

[FrenchieCat]

2. It's the little things that we hardly notice......

but things are a changing!

[JNelson6563]

3. More good stuff to help those who really need it!

And hardly a peep about it on DU. *sigh*

Julie

[JDPriestly]

4. These changes will make a lot of difference to people who get into

financial trouble because they are having emotional problems or health problems or marital or other problems that prevent them from adequately keeping order in their financial affairs.

[Tarheel_Dem]

5. My credit card statements already look different. They spell out how much more...

I'll wind up paying in interest, and for how long (in years), if I only pay the minium. Needless to say, I always pay more than the minimum. Recommended.